Raymond James, the Florida-based brokerage firm, will reportedly its own menu of commission-free exchange traded funds for registered investment advisors (RIAs) and their clients.
Raymond James’ RIA unit includes about 110 RIA firms and more than $10 billion in assets, reports Ashley Lau for Reuters. The company could begin offering 120 ETFs on a commission-free basis as soon as Nov. 1, according to Reuters.
It is expected that Raymond James’ initial foray into commission-free ETFs will feature a combined 120 funds from First Trust, AdvisorShares, ALPS Advisors and Greenhaven. First Trust is the sixth-largest U.S. issuer of ETFs while Maryland-based AdvisorShares is one of the largest issuers of actively managed ETFs.
The Raymond James commission-free ETF effort could be seen as a response to similar programs from Charles Schwab (NYSE: SCHW), TD Ameritrade (NasdaqGS: AMTD) and Fideltiy, which have proven successful. However, there are also important differences.
For example, the Fidelity, TD Ameritrade and Schwab ETF OneSource do not limit commission-free offerings to advisors. Rather, those platforms are also open to retail investors and as data from Schwab indicate, that has proven to be a shrewd move.
On Monday, California-based Schwab said ETF assets custodied at the firm reached $216 billion at the end of the third quarter, a 20% year-over-year increase. “Retail traders captured 12% of the 12-month ETF flows, up from just 6% in the prior year,” according to Schwab. At the end of the third quarter, there were $19.4 billion in assets on the OneSource platform. [Schwab Continues Torrid Pace of ETF Asset-Gathering]